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Telecom market last year with its fourth generation services, Reliance Jio on Friday shook up the sector again with a 4G feature phone, to make inroads in the country’s 500-million customer base.

The Mukesh Ambani-owned firm, which of late has been witnessing slowing customer addition, will give the phone effectively for free to customers, with a three-year contract. The phone will be sold for a security deposit of Rs 1,500, returnable at the end of three years for a full refund. It is not clear what consumers may do if they want to continue using the phone. The bundled Jio connection will come with three different usage plans — Rs 24 for two days, Rs 54 for a week, and Rs 153 for a month.

The phone should allow Jio to speed up customer addition, as it will now cater to the mass



market. And, add pressure on other telecom operators, now forced to match the rates, which come bundled with the device.

Telecom stocks fell up to 3 per cent on concerns over increased competition in the sector. Shares of Idea Cellular went down 3.1 per cent to end at Rs 91.90, while Bharti Airtel fell 2 per cent to Rs 411.15 on the BSE.

The RIL stock ended almost 4 per cent higher and closed at Rs 1,586.20 on the BSE, taking the calendar year-to-date gain to 47 per cent.

“Going forward, we expect the incumbents to remain under pressure as realisations for data, pressure to increase the pace of network roll-out and highly leveraged balance sheets would continue to hurt profitability,” said Nitasha Shankar, head of research, YES Securities.

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